Ngwerume to acquire Old Mutual stake

HARARE - Old Mutual (OM) plans to cede a 3,5 percent stake worth $13 million to Stiefel Investments (Stiefel) led by the group’s former managing director Luke Ngwerume, as part of its indigenisation compliance plan.

Laurence Karumazondo, OM’s company secretary, yesterday said the company will seek shareholders’ approval of the transaction at an annual general meeting to be held on October 1, 2013.

The insurance giant is among the foreign-owned companies under pressure to comply with Zimbabwe’s empowerment policy — compelling foreigners to cede majority shareholding to black locals.

Under the deal, the group will undertake the transaction with the Stiefel consortium through loan financing.

Cabs will provide the funding.

“The purchase consideration for the shares is $13 016 238 for 11 621 641 issued and fully paid up “B class” shares at a price of $1,12 per share.

The amount that is to be funded by the company is $12,755 913 after a two percent down payment of $260 324 to be paid by Stiefel,” Karumazondo said.

The loan has 10-year tenure and will attract a 13 percent interest per annum.

Interest payments will be annually starting eight months “from the date of initial loan disbursement and thereafter on each anniversary thereof.”

Ngwerume’s other Stiefel partners include Cabs chairperson in the Midlands and Matabeleland region Todd Moyo and OM Life Assurance’s non-executive director Tracey Mutavaviri.

In the first phase of implementation and compliance with the law, the company agreed to cede a 25 percent shareholding to insurance beneficiaries, a grant to pensioners equivalent to 10 percent of OM’s stake, grant and awards to staff equivalent to nine percent as well as allocation to strategic indigenous partners on commercial basis equivalent to 3,5 percent.

OM also pledged a grant to Youth Development Fund equivalent to 2,5 percent valued at $10 million and an extra $1 million will be made from its fund.

This comes as recently re-elected President Robert Mugabe has vowed to pursue the indigenisation policy during his new term in office.

“The indigenisation and empowerment drive will continue unabated in order to ensure that indigenous Zimbabweans enjoy a larger share of the country’s resources,” Mugabe told a Defence Forces day gathering last month.

“Now that the people of Zimbabwe have given us a resounding mandate in the governance of the country we will do everything in our power to ensure our objective of total indigenisation, empowerment, development and employment is realised.”

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